Question
4. Celebrity plc. has a target debt-equity ratio of 0.8. Its WACC is 10.5% and the tax rate is 35 per cent (a) If
4. Celebrity plc. has a target debt-equity ratio of 0.8. Its WACC is 10.5% and the tax rate is 35 per cent (a) If the firm's cost of equity is 15 per cent what is its pre-tax cost of debt? (b) If instead you know that the after-tax cost of debt is 6.4 per cent, what is the cost of equity?
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Intermediate Accounting
Authors: kieso, weygandt and warfield.
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978-1118443965, 1118800532, 9781118800539, 978-0470873991
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